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The Twenty-five
Million Loan.

THE financial condition January 18th he sent to Financial Condition of of the National Treasury, in Mr. Sherman, Chairman of the Treasury. the early part of February, the Committee of Ways and was such as to excite no little uneasiness in Means, an exhibit of the state of the Treasthe mind of the Secretary. Of the twenty-ury, and asked for twenty-five millions of million loan authorized the previous June, but a little more than seven millions had been taken. Mr. Cobb's financiering had shaken the credit of Government so far, that its paper not only no longer commanded a premium, nor even touched par, but was only disposed of at ruinous rates. The act authorizing the loan restricted its sales at par, and capitalists refused to take it. This refusal left the department nearly bankrupt, at the moment of Mr. Cobb's withdrawal, " to lend the force of his great financial genius to the construction of a new Government." He assumed the keys of a plethoric chest-he left the keys of an empty one.

dollars to meet the wants of Government up, to June. February 1st, Mr. S. introduced, in the House, his Loan bill, calling for twentyfive millions. The representations made, and the good management used, crowded the bill through without delay. February 2d it went to the Senate, which returned it to the House slightly modified. A conference soon consummated its final passage, but it did not receive the President's signature until Feb. 9th.

Pending its passage, Mr. Dix had addressed the Governors of the loyal States, advising that the Legislatures should endorse the loan to the extent of the special deposits held by them of the surplus fund. To this propoMr. Dix, upon assuming charge of the sition several States answered promptly—the Treasury Department, set about recuperating loyal-hearted Ohio being first. She, holding its exhausted finances. He was chosen for $2,097,000 of that fund, would guarantee the his fitness. In that hour of calamity, it be- Government loan to that amount. Pennsylhooved the President to call to his side men vania next voted to endorse for her quota of reputation for integrity, who would, in -$2,800,000. These endorsements were not, some degree, restore the confidence of an out- however, accepted by the terms of the act— raged people. Devotion to "Southern inter- hence the loan went forth offering only the ests" had ruined his Administration, and he Government's faith as security. This so far could only save his memory from being writ-weakened the prospect for favorable bids, that ten Odious by rising above a partisan's ambi- Mr. Dix sought to obtain a special act authortion at the last hour. Mr. Dix, as the representative of Northern sentiment, and having the confidence of the magnates of Wall street, was a wise choice; and if the brief period of Mr. Buchanan's term would not allow of a full restoration of public credit, it would, at least, permit him to stay the decline which threatened a fatal issue.

izing the acceptance of the proffered State guarantees, to the extent of the eight millions first to be put on the market. In possession of these, he felt that the offers would be of a very satisfactory character. He communicated his wishes in the matter to Mr. Sherman, under date of February 12th, in the following exhibit:

The Secretary's Exhibit.

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SIR-I deem it my duty to "I have discharged my duty to them and to the call your attention to the press-country, by making this exhibit of the public wants, ing demands on the Treasury, and in pointing out the only mode by which, in my and to suggest the only mode of meeting them with- judgment, they can be met without the most serious out seriously impairing the public credit. The lia- consequences to the interest of the Government, and bilities due and to fall due before the 4th of March individuals to whom it is indebted. The short time next, are as follows: to elapse before the close of the present session of Congress renders it indispensable that I should advertise for a loan on the 13th or 14th inst., at the farthest.

For the State Department...... For the Interior Department..

.$ 101,868 .... 1,302,327

For the War Department..


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'Secretary of the Treasury." Mr. Sherman immediately introduced a bill covering the acceptance of the guarantees, when Garnett, (Dem.,) of Virginia, refused, by his objection, to allow the intro

NOTE.—These are the round numbers, making a total of duction of the resolution of enactment. His


"The accruing revenue will, it is estimated, net about $1,900,000 of the amount, leaving but eight millions to be borrowed.

"There is in the Treasury, subject to draft of the Treasurer of the United States, but little more than half a million, and there are requisitions in the Treasury Department amounting to nearly ten millions of dollars unanswered. In the present condition of the country it would be impossible to borrow the money needed to meet the wants of the Treasury, unless at a discount which would seriously impair the public debt, without some pledge in addition to that of the faith of the Government. Several of the States, in accordance with a suggestion contained in my letter to the Committee of Ways and Means, of the 18th January last, have offered to superadd the pledge of their faith to that of the United States, for the redemption of any bonds it may issue, to the amount of the public moneys deposited with them, respectively, for safe keeping, under the act of 23d June, 1836.


If Congress will authorize these offers to be accepted, the money required to meet the liabilities due and to fall due before the 4th of March can be obtained at par. If the authority is not granted, I am satisfied it can only be procured on terms which would be exceedingly disadvantageous to the Government, and in the highest degree detrimental to its credit. I should not venture to ask for a loan exceeding $2,000,000, and nearly the whole of this amount would be required to meet the redemption of Treasury notes to fall due before the 4th of March. There would be due on that day about $6,000,000 to public creditors, whose demands could not remain unsatisfied without subjecting them to most serious inconveniences, and in some cases to serious losses.

words and demeanor were violent. He said: "After the recent declaration of war by the President-elect of the United States, [referring to Mr. Lincoln's Indianapolis speech-see page 373,] I deem it my duty to interpose every obstacle to the tyrannical and military despotism now about to be inaugurated." Mr. Dix again wrote, under date of February 13th, to warn the Committee of what must be the result of the refusal to sanction the acceptance of the State guar- · antees. He said:

The Secretary's Second Letter.

"SIR-It is indispensable that I should give to-day notice of a loan of $8,000,000, in order that the Government may be in funds to meet indispensable payments on the 1st proximo.

"The obstacles unexpectedly thrown in the way of the passage of the bill reported by your Committee yesterday, authorizing the acceptance of the guarantee proffered by several of the States, compel me reluctantly to ask for the loan on the usual terms; for, in the present distracted state of the country, should it continue, I fear there must be a loss of $800,000. Under all the circumstances, however, instead of calling for $2,000,000, as I suggested in my letter to you of the 11th inst., I have thought it advisable to ask for $8,000,000, reserving the right of declining to accept bids which may be deemed disadvantageous to the United States, and taking the chance of a favorable change in the political condition of the country within the next ten days, at the end of which proposals for the loan will be received. Allow me to remind you that the Loan bill, under which I ask for proposals, was not presented for the approval of the President until the 8th inst.; and that, on the 9th inst., Saturday, there

The Secretary's Second Letter.


was not a quorum of your Committee to act on the bill reported yesterday, accepting the

guarantee of the States.

"I advert to these circumstances to exonerate my self in the judgment of those who have an interest in the discharge of the liabilities pressing upon the

Treasury from any want of diligence on my part.

Your Committee, I believe, all understand that more than five millions of Treasury notes have been re

deemed out of the current revenues, and that about two millions more fall due before the 4th of March, less the amount to be paid in for public dues, mak ing nearly the eight millions now required to meet the public wants before that day; that more than one-third of the revenue derived from the customs is paid in Treasury notes due at a future day; and that the present embarrassed state of the Treasury arises from the operation of a paper system which compels the Government to anticipate the payment of its debts out of its current receipts. As I have decided to issue the notice for a loan to-day, I am constrained to request that the bill reported yesterday may not be acted on, as the expectation of a call for a loan at a future day on guaranteed stock could not fail to have a very disadvantageous effect on the proposals to be made for that now asked for. "JOHN A. DIX."

The Bids obtained for the Loan.

The advertisement, proposing for the loan, appeared in the New York papers of February 18th. It was taken, with unexpected avidity -the amount bid for being $14,355,000, and the bids ranging from 75 to 96-10 per cent. The allotment was: $4.915.000 at 90-15 per cent., and the remainder, (up to the eight millions offered) at figures ranging up to 96-10 per cent. Had the State guarantees been accepted, the average would have been, in all probability, about 96. As it was, it fell below 92-for which the "gentleman from Virginia" had to assume the responsibility. Considering the aspect of political affairs, and the state of the country, that the loan should have been taken at such rates is an incontrovertible evidence of the faith which capitalists reposed in the incoming Administration. Something may have been due to a patriotic desire to sustain the Government, in its hour of need; but, confidence was the secret of the terms obtained.

The last loan negotiated by Mr. Cobb was for ten millions of five per cents, awarded on the 22d of October, 1860. The history of that


Evidence of Mr. Cobb's Criminality.

award is a luminous illustration of the devices and desires of the then Secretary's heart. The pressure he applied to Wall Street to influence the election became evident at a late day, when a number of the bidders asked Congress for relief. To show what politicians sometimes do, and what recklessness reigned in some departments of the Government, we have but to give the petition of the bankers to Congress. After stating that they were subscribers to that portion of the loan, authorized by the act of June 22d, 1860, which was offered in October, the petitioners added:

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That although your petitioners received notice of the acceptance of their offers on the 22d of October last, no orders reached the engravers in New York to prepare such coupon bonds until the 26th of the same month, being four days after such notice of acceptance, and the first blank coupon bonds did not leave this city for Washington until the 3d day of November, eleven days after the notice of the award.

"That in consequence of the delay, orders for these bonds were withdrawn from your petitioners, and even sales made by them, in various instances, canceled by the purchasers, owing to the failure of delivery and in other instances, to retain their customers, your petitioners were obliged to purchase for them United States bonds of 1874 as a substitute for these coupon bonds."

Thus much in exposition of Mr. Cobb's way of doing business with Northern men. The petitioners further stated that they were bidders chiefly for other parties-that, in consideration of the non-compliance of the Secretary with his duty in the delivery of the bonds and coupons, the parties for whom they bid refused to take the amount awarded, urging as a justification the following specific reasons, to which the reader's attention is directed:

Evidence of Mr. Cobb's Criminalty.

the application for

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"First: In consequence of
the delay above referred to.
"Second: That directly after
such bonds, and the failure of

"Third: That the Government had thereby lost the power to deliver the securities contracted for. Fourth: That their contract was for bonds of the United States, having the faith of all the States pledged for their redemption; but, before the expira

tion of the time for their delivery, the unity of the States was invaded by the establishment, pro forma, by one of the States, of a separate and independent


The Record of

and the complicity of Mr. Floyd in the further frauds charged-was made February 12th. It covered the entire ground of the facts of the abstraction, and the incidental transac the Government to furnish them, the then Secretions by which the fraud was accompanied. tary of the Treasury announced publicly in market, It was a sad revelation for the American peothat in the event of the success of the Republican party in the ensuing election, the Southern States would with ple to read, and tended to strengthen the draw from the Union, and the Government be broken growing sentiment of indignation against up; whereby the credit of the United States was the Administration. The credit of Governimpaired, and the market value of the bonds de- ment ruined; the property of Government pressed; or, in other words, as they contended, the specially placed in the way bonds were rendered a damaged article, without of seizure, and seized to the fault of the buyers.' amount of many millions; the tampering with treason to such an extent as to encourage it even to unpremeditated lengths;-all to be crowned by a direct robbery of the Treasury of millions, could not excite, in the breasts of a people not dead to wrong, any other feeling than that of shame and indignation. Even the warmest partisans of Mr. Buchanan could find no excuse, no As the Presidential election was to be af- palliation, for the condition of things; and fected by such a representation, we here have execrations came from men slow to forget the evidence of the Secretary's attempt to in- party affinities, but too loyal to suffer humilfluence that election by the strong leverage iation in silence. Whether time will prove which ten millions of dollars would give. the censure heaped upon the Chief Magistrate His representations, it will be seen, were to have been just or unjust, remains to be made after the bids had been put in, but be-seen; but one fact is indubitable, that no man fore the bonds were delivered; and, as the in America ever was so generally and so unbidders were not served until after the day qualifiedly condemned-to use no harsher of election, the retention of the bonds was word. to cause a panic among the bankers, and compel them to lend all the power of their vast resources to throw the elections in New York and New Jersey against the Republican nomince. When Mr. Toombs said, in the Montgomery Congress, in proposing Howell Cobb for President, [see page 335,] that "he had been illustrious in the arena of the General Government"-that "his name was coextensive with the length and breadth of the whole country" he could not have spoken in irony; and yet, such was Mr. Cobb's reputation in those circles where he was best known, that the great agitator's words were only true in He, evidently, was valued at Montgomery in proportion to the wrong he had done the General Government and to Northern interests.

an ironical sense.

We can give but a reference to the lengthy report made by the Committee, of which Morris, (Dem.,) of Illinois, was Chairman. The summary of the investigations was given in the following paragraphs:

"In relation to the accept


ances issued unconditionally Report on Mr. Floyd's
by the late Secretary of War,
your Committee deem it their duty to state all the
facts they have been able to discover, as fully as
possible. They amount, in the aggregate, to the
enormous sum of $6,179,395. Add thereto the con-

ditional acceptances which have already been
thrown back upon the Government through the
agency of Mr. Bailey, and the sum-total is $6,977,395.
This estimate is based upon data furnished by the
War Department. It appears, therefrom, that ac

ceptances to the amount of $840,000 were returned to the Department for cancellation. Mr. Russell, The report of the House Select Committee however, claims to have returned only $200,000 or appointed December 24th-to investigate the $250,000. He further states that the acceptances great robbery of bonds, [see pages 113-114,] | which he did return were those which had matured

Report on Mr. Floyd's Default.


in his own pocket, and could not, therefore, be negotiated. But this assertion is positively contradicted by the indorsements on the returned acceptances, and by the testimony of Mr. Irwin, a clerk in the War Department. From the careless and irre

sponsible manner in which business was transacted by that gentleman and the late Secretary of War, and from the fact that it was the habit of Governor Floyd to issue acceptances at the Department or at his house, or at whatever place he happened to be, and

other considerations, it is a matter of great uncertainty whether or not the $840,000 should be deducted from the sum heretofore stated. The probability is, that when the acceptances were returned to Governor Floyd by Mr. Russell, he accepted others at the same time, for the same amount, of which there was no registry made. It is deemed safest to proceed upon the supposition that the acceptances made in the place of those returned were registered. Upon this hypothesis, the $840,000 must be deducted from the $6,179,395 of unconditional acceptances made and registered in the War Department. This would leave of them, so far as is shown by the records of that Department, $5,339,395 still in circulation. Add to this amount the $798,000 of conditional acceptances received by Mr. Bailey in lieu of the bonds, and the aggregate is $6,137,395. Here, then, conforming the statement to the records of the War Department, is a deficit of $6,137,395 to fall upon the holders of these acceptances, or to be assumed in 'some way by the Government.

"The evidence shows that the acceptances have been sold in various parts of the United States, wherever a bank or private individual could be in'duced to purchase. Inasmuch, however, as the amount of those that have been traced directly into the hands of present holders constitutes but a small fraction of the sum still unaccounted for, and as owners are daily filing additional claims at the War Department, it is deemed unnecessary to give a detailed statement of the discovered acceptances, or to make other mention of them, than to refer to the papers relating thereto, presented by the War Department, and to the general evidence."

Mr. Floyd urged, in his defence, [see page 152,] that it had been the custom of the department to issue acceptances for work to be performed on contract; but this proved to be worse than falsification. It had not only not been customary to do so, but, after the President was made aware of Mr. Floyd's "custom," and in alarm had positively forbidden it, the Secretary continued the practice. Mr. Benjamin, of Louisiana, had been written to by

bankers in New York, who



Report on Mr. Floyd's Default.

frightened at the amount of these acceptances on the market; and had, at the President's request, called upon Mr. Floyd to warn him of the dangers of this reckless use of his official name. Floyd, two days after the interview, wrote to Mr. Benjamin to thank him for his advice in the matter, at the same time promising to cease from any further issues of paper in advance of work performed by the Utah Army Supply Contractors, Messrs. Russell, Majors, and Waddell. How he kept even this promise the Committee tell us;

"It has already been shown that, contrary to the assertion of Gov. Floyd, no practice of issuing acceptances had ever prevailed in the War Department previous to its introduction by himself; that he issued these acceptances indiscriminately, and without reference to instalments, or the arrival or departure of trains, and without regard to money which was due, or which was expected to become due. One would naturally expect to find that Governor Floyd, having been admonished by one whose position and legal learning gave authority to his advice, having confessed the illegality of his proceedings and expressed a determination to make no further acceptances, would have proceeded thereafter with great caution and circumspection, even if he did not entirely discontinue his previous policy. It appears, however, that, supposing the note to Mr. Benjamin, before referred to, to have been written a year ago, there have been issued by Governor Floyd, since that time, acceptances to the amount of $2,163,000; in April, $40,000; May, $250,000; June, $350,000; July, $95,000; August, $235,000; September, $125,000; October, $270,000. To this amount must be added the $798,000 of unconditional acceptances of which there is no registry, and the grand total is as above stated. Having had his error and its probable consequences distinctly pointed out, and having expressed his intention to refrain in future from the commission of similar acts, he still persists in his former course, and actually issued an acceptance for $155,000 at a date so late as the 13th of De

cember, 1860. Whether this manifest contempt of counsel, disobedience of law, and violation of a solemn promise can be reconciled with purity of private motives and faithfulness to public trusts, is for the House to determine. It is the opinion of your Committee that they cannot."

This report, adding certainty to rumor, placed the ex-Secretary in a position of unenviable notoriety before his countrymen. Having been indicted (January 28th) on two

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